DCIT., CIRCLE-8(1), HYDERABAD vs. DELOITTE TAX SERVICES INDIA PRIVATE LIMITED, HYDERABAD

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ITA 672/HYD/2022Status: DisposedITAT Hyderabad07 March 2023AY 2019-203 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that employee's contribution to PF/ESI, if not remitted before the due date prescribed in the respective enactments, cannot be allowed as a deduction, referencing the Supreme Court decision in Checkmate Services (P) Ltd.

What were the facts?

The assessee company claimed a deduction for employee's contribution to PF/ESI. The CPC disallowed this deduction as the remittance was made after the due date but before the return filing date. The CIT(A) allowed the assessee's appeal.

What were the issues?

Whether delayed remittance of employee's contribution to PF/ESI is allowable as a deduction under Section 43B despite specific disallowance provisions under Section 36(1)(va).

Which sections of the Income-tax Act were involved?

Section 43B,Section 36(1)(va)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, Hyderabad ‘ A ‘ Bench, Hyderabad

Before: Shri R.K. Panda & Shri Laliet Kumar

For Respondent: Shri KPRR Murthy, DR
Hearing: 06/03/2023Pronounced: 07/03/2023

आयकर अपील�य अ�धकरण, हैदराबाद पीठ IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘ A ‘ Bench, Hyderabad Before Shri R.K. Panda, Accountant Member AND Shri Laliet Kumar, Judicial Member Assessment Year: 2019-20 Dy. C.I.T. Vs. Deloitte Tax Services Circle 8(1) India Private Limited Hyderabad Hyderabad PAN:AABCD9771F (Appellant) (Respondent) PAN: Assessee by: N o n e Revenue by: Shri KPRR Murthy, DR Date of hearing: 06/03/2023 Date of pronouncement: 07/03/2023 ORDER Per Laliet Kumar, J.M This appeal filed by the Revenue is directed against the order dated 21.09.2022 of the learned CIT (A)-NFAC, relating to A.Y.2019-20.

2.

None appeared on behalf of the assessee.

3.

The only ground raised by the Revenue read as under: “Whether on the facts and circumstances of the case, the learned CIT (A) was justified in holding that the delayed remittance of employee’s contribution towards PF/ESI is allowable u/s 43B inspite of specific provisions of the Income Tax Act u/s 36(1)(va) providing for disallowance of the same”.

4.

Facts of the case, in brief, are that the assessee is a company, filed its return of income declaring total income at Page 1 of 3

ITA 672 of 2022 Deloitte Tax Services India P Ltd Rs.1,51,27,53,750/- and paid taxes of Rs.57,98,51,165/- resulting a refund of Rs.5,12,34,500/-. The CPC Bengaluru issued an intimation u/s 143(1) of the Act on 9/6/20020 disallowing the payment of employee’s contribution to provident fund amounting to Rs.1,84,40,473/- on the ground that it is after the due date as per the relevant act but before the filing of the return of income. The Assessing Officer granted refund of Rs.4,47,90,657/- as against the refund of Rs.5,12,34,500 claimed in the return of income.

5.

In appeal, the learned CIT (A) NFAC allowed the appeal of the assessee by disallowing the amount of Rs1,84,40,473/- made by the CPC Bengaluru.

6.

We have heard the rival arguments and perused the record. We find the learned CIT (A) NFAC deleted the addition on the ground that the assessee has remitted such amount to the PF & ESI contribution before the due date of filing of the return. We find the issue stands decided against the assessee by the decision of the Hon'ble Supreme Court in Checkmate Services (P) Ltd (Supra) where it has been held that the employee’s contribution to PF & ESI, if not remitted before the due date prescribed in the respective enactments, cannot be allowed as a deduction. Therefore, the order of the learned CIT (A) NFAC to this extent is contrary to law as laid down by the Hon'ble Supreme Court and therefore, has to be reversed. We hold and direct accordingly. The only ground raised by the Revenue is accordingly allowed for statistical purposes.

7.

In the result, appeal filed by the Revenue is allowed for statistical purposes. Page 2 of 3

ITA 672 of 2022 Deloitte Tax Services India P Ltd

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